How Retailers Can Boost Earnings Through Generative AI


September 19, 2023

Leveraging Generative AI for Retail Success

Generative AI is poised to redefine the retail landscape, offering capabilities from crafting virtual storefronts to curating individualized shopping experiences. As this technology emerges, retailers are faced with the decision: is it the right moment to adopt generative AI?

Recent breakthroughs in generative AI, a subset of artificial intelligence capable of producing novel content like visuals, sounds, texts, and even code, have stirred discussions within the retail sector. In theory, sophisticated generative AI can enhance numerous retail operations due to its interactive and inventive prowess, such as:

  • Enhancing customer interactions
  • Streamlining e-commerce processes
  • Crafting compelling marketing content
  • Improving website user experience … and the list goes on.

Yet, the journey of embedding conversational AI into retail operations isn’t without challenges. Retailers must navigate potential pitfalls like biases, skepticism from consumers, and the possibility of misinformation.

Industry experts from Publicis Sapient weigh in on how retailers can currently harness the power of this technology and what they should be aware of regarding its potential and constraints. Let’s see together how retailers can boost earnings through Generative AI.

Understanding Generative AI’s Scope

Generative AI, at its core, refers to AI models that can craft new data resembling the data they were trained on. A notable example is ChatGPT, unveiled by OpenAI in 2022, which boasts capabilities ranging from composing poems to generating informative content, all while drawing from a vast internet database up to 2021.

While ChatGPT’s unveiling was groundbreaking, generative AI’s potential extends beyond mere chat interfaces. Cutting-edge models can produce endless, context-aware content in various formats. Research indicates that distinguishing between AI-generated and human-created content, be it text, code, or visuals, is becoming increasingly challenging for humans.

However, it’s crucial to note that systems like GPT-3, the backbone of ChatGPT, don’t produce content based on human logic or intellect. Instead, they predict the most probable responses based on their training data. For instance, if a retailer employs AI for personalized ad campaigns targeting diverse customer groups, the AI would predict the next logical content piece based on the given prompt, resulting in a seemingly relevant advertisement.

Despite these constraints, the retail sector stands to benefit immensely from generative AI, especially its ability to continue prompts in a human-like manner.

Harnessing Generative AI for Enhanced Retail Interactions

The integration of Generative AI into the retail sector promises a transformative shift in online customer engagement. If businesses can effectively weave this technology into their digital platforms, the entire paradigm of online shopping might undergo a significant evolution.

Sara Alloy, the lead for retail experiences at Publicis Sapient, suggests, “The dynamics of online shopping touchpoints, including the e-commerce platforms themselves, are on the brink of transformation. Anticipate a surge in search quality, marked by heightened personalization, adaptability, and efficiency.”

1. Streamlined Product Discovery through Conversation

While the conventional search bar remains a staple for online shoppers, introducing conversational commerce, powered by Generative AI, can supercharge this experience. This not only expedites the product discovery process but also holds the potential to boost conversion rates and augment the average transaction value.

Retailers can explore the deployment of advanced search interfaces, reminiscent of “ChatGPT”, to aid consumers in pinpointing products with precision—be it sourcing all components for a particular recipe or assembling a complete ensemble.

2. Enhanced Customer Support with AI-driven Chatbots

The advent of Generative AI paves the way for more sophisticated customer service chatbots. Unlike traditional chatbots confined to a limited set of decision trees, the new breed, backed by advanced generative models, promises limitless conversational avenues.

This innovation offers retailers the flexibility to tailor chatbot interactions, aligning them with brand ethos and ensuring a personalized touch. Such advancements can overturn the prevailing skepticism surrounding automated chatbot interactions.

3. Intelligent Product Recommendations

Generative AI stands to redefine the realm of product suggestions. By analyzing a user’s browsing history across various online platforms, including sister brands, this technology can offer sharper, context-aware recommendations. While current retail practices rely heavily on analytics and tagging to refine user experiences, Generative AI can intuitively guide consumers towards their next purchase or desired action in their shopping journey.

Optimizing Supply Chain Decisions with Generative AI

Beyond the consumer interface, Generative AI holds immense potential in refining a myriad of interactions, be it human-to-human or human-to-machine. The conversational prowess of advanced language models can significantly enhance these interactions, leading to streamlined processes and more informed decision-making.

Rakesh Ravuri, CTO at Publicis Sapient, emphasizes the existing capabilities in the supply chain domain, stating, “Our supply chain infrastructure already boasts control towers for comprehensive visibility and tracking. Coupled with sophisticated prediction and forecasting algorithms powered by AI, the introduction of Generative AI can further bolster decision-making, catering to a plethora of unique scenarios.”

Here’s a closer look at how Generative AI can augment current supply chain technologies:

1. Efficient Package Tracking

One of the perennial queries in the supply chain realm is: “Where’s my package?” At present, stakeholders often resort to manual inquiries or navigate through fragmented tracking data spread across multiple databases. With Generative AI’s conversational edge, such queries can be addressed promptly and accurately. Imagine a scenario where a customer inquires, “When is my package arriving?” or “Is it possible to change the delivery route?” – Generative AI can swiftly and interactively provide the answers.

2. Tailored Packing Solutions

While AI algorithms are already aiding supply chain managers in optimizing packing configurations, Generative AI can introduce an additional layer of troubleshooting for specific challenges. Whether it’s addressing a spill on the warehouse floor or accommodating a specific spacing request within a shipment, managers can seek solutions from Generative AI using plain language, ensuring optimal packing configurations.

3. Dynamic Shipping Label Creation

The realm of shipping label design is rife with complexities, often dictated by a host of unique variables. Generative AI can swiftly navigate these complexities, proposing new label designs that adhere to all constraints. This ensures that decision-makers can maximize label real estate without compromising on essential information.

Harnessing Generative AI for Enhanced E-commerce Operations

Generative AI is not just revolutionizing the front-end customer experience; it’s also making waves in the realm of back-end e-commerce operations. While there’s a perception that the creative output from generative AI models might lack depth, the reality is that these systems are adept at automating routine, consistent content tasks with human-like precision.

Ravuri points out, “With Generative AI, the pace of content creation for e-commerce can be significantly accelerated. While we anticipate future versions of these models to be more transparent and error-free, it’s imperative that the generated content undergoes rigorous review and validation.”

Here’s a deep dive into how Generative AI can be a game-changer for back-end e-commerce processes:

1. Streamlined Product Descriptions

A growing number of retailers are leveraging AI for A/B testing of product descriptions to pinpoint the most captivating version. With the latest strides in AI’s contextual capabilities, there’s an opportunity for retailers to auto-standardize descriptions across diverse sellers. Given the frequent inconsistencies in product descriptions uploaded by vendors, instead of manual overhauls, content creators can guide generative AI using specific guidelines. The result? Product descriptions that resonate with the brand’s voice, are grammatically impeccable, and maintain consistency.

2. Tailored Product Imagery

E-commerce platforms often require a team – photographers, designers, models, and other creatives – to produce a single product image. Enter Generative AI, which can craft personalized product visuals based on textual descriptions and past image data. Consider an athletic wear e-store: it could auto-generate an image showcasing a college-goer donning a sports jersey tailored for a specific demographic, say, a 19-year-old. If shoppers share more personal insights or specific requests, Generative AI can present the product in diverse, contextually relevant settings.

3. Intelligent Transaction Pathways

This capability of Generative AI isn’t limited to individual tasks. It can be extended to entire web pages, enabling retailers to expedite the e-commerce journey for both vendors and consumers. While many e-commerce platforms currently offer static flows or those based on rudimentary inputs like geographical location or referral source, Generative AI can craft bespoke site experiences. It can intuitively populate product details, store specifics, or customer data, ensuring a seamless shopping experience.

The Potential Pitfalls of Generative AI in Retail

While the allure of Generative AI is undeniable, it’s crucial for retailers to recognize the inherent challenges and risks associated with its premature adoption. The brains behind ChatGPT have openly expressed reservations, cautioning against over-reliance on the technology, especially given its tendency to produce highly convincing yet potentially inaccurate responses. The lack of a robust mechanism to authenticate or verify these outputs further compounds the issue.

Furthermore, the call for stringent regulation around Generative AI is growing louder. As the industry grapples with establishing these guidelines, retailers venturing into creating their own generative AI solutions must champion AI education. Instituting safeguards becomes paramount to preempt potential consumer discontent.

Alloy emphasizes the importance of transparency, stating, “It’s imperative for brands to be forthright about their AI interactions. The repercussions of misusing this technology, especially in delicate scenarios, can be severe, as evidenced by the public’s strong reactions.”

Embarking on the Generative AI Journey

For retailers eager to dip their toes into the world of Generative AI, conversational commerce serves as the ideal starting point. It offers a tangible way to gauge the technology’s capabilities before branching out to broader applications within the business ecosystem.

To harness the full potential of Generative AI, retailers should consider the following:

  1. Identify areas where sales associates invest the bulk of their time.
  2. Pinpoint untapped opportunities for upselling and cross-selling.
  3. Explore avenues to streamline access to vital internal information.
  4. Address pain points causing frustration for both customers and sales associates.
  5. Understand the most common queries posed by customers.

In conclusion, while the road to integrating Generative AI is fraught with challenges, the potential rewards in terms of enhanced customer engagement and revenue growth make it a venture worth exploring for forward-thinking retailers.

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